The auditors of Phoenix Venture Holdings, MG Rover's parent, were paid fees of £4.5m for advisory work in the run-up to the collapse of the car company. This included £3.6m for corporate finance advice on the sale of the parts business and £500,000 last year for advice on the aborted deal with Shanghai Automotive Industry Corporation.
Deloitte Touche is being investigated by accountancy regulators who are examining the extent of its non-audit work for PVH, the private investment vehicle for the Phoenix 4 executives who controlled MG Rover before it slumped into administration last April. The fees are revealed in PVH's much delayed 2004 accounts which are being filed at Companies House this week.
Deloitte's heavily qualified audit report on the accounts represents a damning indictment of the reliability of the numbers produced by PVH. Deloitte says: "We have not obtained all the information and explanations that we considered necessary for the purpose of our audit."
The auditors add that they were unable to determine whether proper accounting records had been kept by the company. Ultimately Deloitte said it was unable to form an opinion on whether the individual financial statements for PVH showed a true and fair view of the company's affairs.
The PVH accounts make no attempt to consolidate the performance of the collapsed MG Rover companies and do not include figures from PVH's other subsidiaries which are not in administration or liquidation.
The accounts only paint a picture of PVH in its capacity as a holding company. In the year to December 2004 it ran up a loss of £41.3m compared with a profit of £18.8m a year earlier.
The loss reflects a £71m exceptional write-off of amounts relating to the collapse of MG Rover, the Powertrain engines subsidiary and related subsidiaries. The balance sheet suggests PVH had net liabilities of £1.6m at the year end compared with net assets of £39.7m at the end of 2003.
The PVH board has concluded that the company will cease to trade. PVH and its other trading subsidiaries will be wound up.
